The Hindu Business Line : GSPC issues LI to Saipem for offshore oil rig

GUJARAT State Petroleum Corporation (GSPC) has issued a Letter of Intent (LoI) to Saipem SPA, part of ENI, Italy for hiring out its oilrig for a period of 200 days.

The rig, Saipem Perro Negro III, would has been contracted for drilling four wells and is being hired at $60,000 per day.

The first well is to be drilled during the second week of May in a bid to be in position before the onset of the South-West monsoons.

GSPC had earlier short-listed Atwood, US as the lowest bidder as per a global tender to supply the rig.

However, Atwood's rig, Vicksburg, in Malaysia with Exxon Mobil, is on offer to Chevron, also of the US.

GSPC had gone scouting to the UAE for an alternative arrangement so that there was spillover of schedule, pushing back the exploration clock by a few months on account of the monsoons.

It is understood that the Saipem deal is working out to be cheaper than the original one under negotiation with Atwood.

The oil rig, currently undergoing maintenance work at a dry dock in Sharjah, will be brought to the KG-OSN-2001/3 block adjoining that of the Reliance Industries Ltd (RIL) in the Krishna Godavari basin.

As per the terms of the LoI issued to Saipem, GSPC would have the option of extending the tenure of the contract for 10 exploratory wells.

GSPC, which is one of the four prospectors currently drilling for gas in the KG Basin, expects to be in a position to commence commercial production by January-March 2006, if the project is successful.

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